Devro has reported a bumper year and rewarded shareholders with a 40 per cent rise in dividend.

The Moodiesburn company, which makes sausage skin and other collagen casings for the food industry, is increasing the full year dividend to seven pence per share.

It reported a 7.5 per cent rise in revenue to s237 million with pre-tax profits more than doubling to s55.2 million in the 12 months to December 31, 2010.

Devro said the growth was due to increasing meat consumption in emerging markets and the conversion of sausage casings from gut to collagen.

Steve Hannam, chairman, said: "I am pleased to report on a year of progress in the business.

"In a period when the emphasis began to switch from recovery to growth, operating profit before exceptional items increased 39.4 per cent compared to 2009.

"Strong cash generation has enabled a further reduction in net debt to s12.2 million even after investing s26.9 million in capital expenditure during the year."

The adverse weather in December last year caused problems at plants in the UK, US and Australian operations which hit operating profit by around s600,000 due to lost production, lower sales and higher costs.

The company intends to spend around s45 million improving its manufacturing facilities this year.

This includes £12 million to increase capacity at its Bellshill factory and install technology for high speed manufacturing of collagen casings for continental European wiener sausages.

Devro employs 479 people across its plants in Bellshill and Moodiesburn.

Alan Kilpatrick, managing director of Devro Scotland said, “This is a substantial investment, which will have a real impact on the manufacturing capability of the Bellshill plant and our operations in Scotland, ensuring that we continue to play a key role in Devro’s global supply chain as the business continues to grow and reinforcing the importance we place on the highest quality of manufacturing in Scotland.

“Work on the installation of new production lines will commence shortly with completion expected to be by the end of this year."

Peter Page, chief executive, added: "We expect to see sales volumes increase further as the capacity from recent investments comes on stream and new products displace gut.

"We will continue to seek margin improvements as the benefits of manufacturing efficiencies come through, and we are planning significant new investments to provide capacity for further growth in 2012 and 2013."